AMP Bank cuts investor home loan interest rates

AMP Bank has made interest rate cuts as deep as 0.20 percentage points to a number of its investment property loans in a bid to attract new borrowers.

In August last year, AMP reduced a number of investor home loan rates by up to 0.30 percentage points only a month after making hikes to some investor rates.

AMP’s latest rate changes to investor loans comes after the banking regulator removed interest-only home loan restrictions for most lenders on January 1, this year.

For nearly two years, lenders were limited by the amount of interest-only mortgages they could issue as the Australian Prudential Regulation Authority cracked down on risky lending.

AMP’s rate cuts only apply to new borrowers and not to existing customers with the steepest cut of 0.20 percentage points applying to its interest-only loans for the Professional Package, Affinity Package and Select Package with a loan amount of $750,000 and more.

While the principal and interest version of these products have been lowered by 0.05 percentage points.

The Affinity Package’s principal and interest rate is now 3.94% (comparison rate of 3.99%) and its interest-only rate is now 4.19% (comparison rate of 4.08%).

AMP has also ended its Essential Home Loan special offer of 3.69% (comparison rate of 3.72%) for owner-occupiers with a $100,000 plus loan.

The bank’s changes also follows National Australia Bank’s announcement on Thursday that it will increase rates across a range of its owner-occupier and investor home loans by the end of the month due to wholesale funding cost pressures.

NAB-owned UBank, Bank of Queensland and Virgin Money are among a series of lenders to lift rates out of cycle with the Reserve Bank’s steady cash rate so far this year.